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The cost of forward contracting in the Mississippi barge freight river market
Author(s) -
Isbell Bradley,
McKenzie Andrew M.,
Wade Brorsen B.
Publication year - 2019
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/agr.21611
Subject(s) - barge , business , rest (music) , economics , engineering , marine engineering , cardiology , medicine
Abstract Barges on the Mississippi River system are traded via a forward market. We find that risk premiums to use this market vary by season and in terms of which party bares the cost of forward contracting. During the summer season barge operators pay a risk premium. Yet during the rest of the year, elevator operators pay a premium to lock in rates.